ING Banking Analysis

Comparative study of Banking Operations with special reference to Retail Banking at
ING Vysya Bank and SBI Bank, Hubli.
EXECUTIVE SUMMARY
Title of the Project
KLEs Institute of Management Studies and Research, Hubli
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Comparative study of Banking Operations with special reference to Retail
Banking at ING Vysya Bank and SBI Bank
Need for Study
The Indian economy is growing at the rate of 9% p.a. There are various
factors contributing for the development of economy. One of the industries which
have revolutionized the economy is banking. Change in the IT & faster growth has
changed the banking operations to a great extent. Banking operations have led to a
great development of economy & meeting customers needs.
Among various sectors that bank is involved, retail banking is one area has
changed gradually in meeting dynamic needs of customers. I have undertaken my
study in area of retail banking in order to get the basic understanding of banking
operations especially retail banking. As retail banking activity has been changing &
very completive in nature in meeting needs of customers. Being nationalized bank &
in spite of competition from private & other nationalized bank, ING Vysya bank has
been focus on retail banking. The idea of undertaking this project is to understand the
customers present expectation from ING Vysya bank & even to know their
perception about retail banking in this competitive banking scenario. The study even
takes into consideration aspects of comparative analysis of retail banking between
ING Vysya bank and SBI bank.
About The Project

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Retail Banking
Retail banking is a banking service that is geared primarily toward individual
consumers. Retail banking is usually made available by commercial banks, as well as
smaller community banks. Unlike wholesale banking, retail banking focuses strictly
on consumer markets. Retail banking entities provide a wide range of personal
banking services, including offering savings and checking accounts, bill paying
services, as well as debit and credit cards. Through retail banking, consumers may
also obtain mortgages and personal loans. Although retail banking is, for the most
part, mass-market driven, many retail banking products may also extend to small and
medium sized businesses. Today much of retail banking is streamlined electronically
via Automated Teller Machines (ATMs), or through virtual retail banking known as
online banking.
The annual growth in bank credit to the commercial sector is at 25.4% as on
March 31, 2007 and was lower than 27.2% against previous year. Till 2010, retail
banking is expected to grow at a CAGR of 28% to touch a figure of INR 9,700
billion. This requires expansion and diversification of retail product portfolio, better
penetration
and
faster
service
mechanism
The report on Retail Banking Industry in India covers industry segments like
housing loan, auto loan, personal loan, education loan, consumer durable loan, credit
card and regulatory frame work for retail banks is also discussed. The report gives
retail banking industrys current performance and future outlook. Total 22 major retail
banks in India are covered in terms of their performance, strategy and outlook. Key
Highlights Covered - During 2006-07, gross credit extended by Indian commercial
banks grew by 34.83% to touch INR19, 495 billion.
- Retail credit constitutes about 25% of the total credit and has grown by 28.0% to
INR4,218.3
billion
- The annual growth in bank credit to the commercial sector is at 25.4% as on March
31, 2007 and was lower than 27.2% against previous year.
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- Till 2010, retail banking is expected to grow at a CAGR of 28% to touch a figure of
INR 9,700 billion.
Retail banking is typical mass-market banking where individual customers use
local branches
of larger commercial banks. Services offered include: savings and
checking accounts, mortgages, personal loans, debit cards, credit cards, and so on.
The Retail Banking environment today is changing fast. The changing customers
demographics demand to create a differentiated application based on scalable
technology, improved service and banking convenience. Higher penetration of
technology and increase in global literacy levels has set up the expectations of the
customer higher than never before. Increasing use of modern technology has further
enhanced reach and accessibility.
SCOPE FOR RETAIL BANKING IN INDIA
It helps in enhancing the economic development of a country.
Increase
in
the
purchasing
power.
The
rural
areas
have
the large
purchasing power at their disposal and this is an opportunity to market Retail

Banking.
India has 200 million households and 400 million middleclass population more than
90% of the savings come from the house hold sector. Falling interest rates have
resulted in a shift. Now People Want To Save Less And Spend More.
Nuclear family concept is gaining much importance which may lead to large savings,
large number of banking services to be provided are day-by-day increasing.
Retail banking provides the tax benefits viz., in case of housing loans the borrower
can avail tax benefits for the loan repayment and the interest charged for the loan.
ADVANTAGES OF RETAIL BANKING:

Retail banking has inherent advantages outweighing certain disadvantages.
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Advantages are analyzed from the resource angle and asset angle.
Resource angle
Retail deposits are stable and constitute core deposits.
They are interest insensitive and less bargaining for additional interest.
They constitute low cost funds for the banks.
Effective customer relationship management with the retail customers built a strong
customer base.
Retail banking increases the subsidiary business of the banks.
Assets angle
Retail banking results in better yield and improved bottom line for a bank.
Retail segment is a good avenue for funds deployment.
Consumer loans are presumed to be of lower risk and NPA perception.
Helps economic revival of the nation through increased production activity.
Improves lifestyle and fulfils aspirations of the people through affordable credit.
Innovative product development credit.
Retail banking involves minimum marketing efforts in a demanddriven economy.
Diversified portfolio due to huge customer base enables bank to reduce their
dependence on few or single borrower
Banks can earn good profits by providing non fund based or fee based services
without deploying their funds.
DISADVANTAGES OF RETAIL BANKING:
Designing own and new financial products is very costly and time consuming for the
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bank.
Customers now-a-days prefer net banking to branch banking. The banks that are slow
in introducing technology-based products, are finding it difficult to retain the
customers who wish to opt for net banking.
Customers are attracted towards other financial products like mutual funds etc.
Though banks are investing heavily in technology, they are not able to exploit the
same to the full extent.
A major disadvantage is, monitoring and follow-up of huge volume of loan accounts
inducing banks to spend heavily in human resource department.
Long term loans like housing loan due to its long repayment term in the absence of
proper follow-up, can become NPAs.
The volume of amount borrowed by a single customer is very low as compared to

wholesale banking. This does not allow banks to to exploit the advantage of earning
huge profits from single customer as in case of wholesale banking.
OPPORTUNITIES
Retail banking has immense opportunities in a growing economy like India.
As the growth story gets unfolded in India, retail banking is going to emerge a major
driver. The rise of Indian middle class is an important contributory factor in this
regard. The percentage of middle to high-income Indian households is expected to
continue rising. The younger population not only wields increasing purchasing power,
but as far as acquiring personal debt is concerned, they are perhaps more comfortable
than previous generations. Improving consumer purchasing power, coupled with more
liberal attitudes towards personal debt, is contributing to Indias retail banking
segment.
The combination of above
factors
promises
substantial growth in retail
sector, which at present is in the nascent stage. Due to bundling of services and
delivery channels,
the areas of potential conflicts of
interest
tend to increase in
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universal banks and financial conglomerates. Some of the key policy issues relevant
to the retail-banking sector are: financial inclusion, responsible lending, and access
to finance, long-term savings,
financial capability, consumer protection, regulation
and financial crime prevention.
CHALLENGES TO RETAIL BANKING IN INDIA
The issue of money laundering is very important in retail banking. This compels all
the banks to consider seriously all the documents which they accept while approving
the loans.
The issue of outsourcing has become very important in recent past because
various core activities such as hardware and software maintenance, entire
ATM set up and operation (including cash, refilling) etc., are being outsourced
by Indian banks.
Banks are expected to take utmost care to retain the ongoing trust of the public.
Customer service should be at the end all in retail banking. Someone has rightly said,
It
takes months to find a good customer but only seconds to lose one.
strategy of
Thus,
Knowing Your Customer (KYC) is important. So the banks are
required to adopt innovative strategies to meet customers needs and requirements in

terms of services/products etc.
The
dependency
on
technology
has
brought
IT
departments additional
responsibilities and challenges in managing, maintaining and optimizing the

performance of retail banking
networks. It is equally important that banks should
maintain security to the advance level to keep the faith of the customer.
The efficiency of operations would provide the competitive edge for the success in
retail banking in coming years.
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The customer retention is of paramount important for the profitability if retail
banking business, so banks need to retain their customer in order to increase the
market share. One of the crucial impediments for the growth of this sector is
the acute shortage of manpower talent of this specific nature, a modern banking
professional, for a modern banking sector. If all these challenges are faced by
the
banks with
utmost
care
and deliberation, the retail banking is expected to
play a very important role in coming years, as in case of other nations.
Objectives of the Study
To study retail banking at ING Vysya bank and SBI bank
To study the customers satisfaction level at ING Vysya bank and SBI bank
To understand perception of customers about retail banking in selected banks
To know expectation of customers from ING Vysya bank and SBI bank
Methodology
Data collection method
Following are the types of data used for fulfilling the study objectives.
Primary data
Questionnaire survey of 100 customers (50 each bank)
Interaction with bank officials
Secondary data
Bank websites, Journals, Bank books and Records
Study Area
Hubli city ING Vysya (Regional Office) And SBI (Regional Office)
Research Design
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Exploratory Research
Proposed Outcome
To the Bank
- They will come to know about the perception of customers about retail banking
- They will come to know about expectations and scope of retail banking at ING
Vysya, if any
Limitations
- Only SBI and ING Vysya Bank are taken for comparison purpose
- The study is restricted to Hubli city only.
- The study of objectives are complied related to retail banking.
FINDINGS:
SBI charges relating to commission, interest rates etc are less as compared to ING
Vysya.
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The services of SBI Bank appeal more to the customers and the customers are
satisfied with the services of SBI Bank more as compared to ING Vysya.
As regards safety, ING Vysya seems to provide more safety to its customers as
compared to SBI.
SBI hits close to 100% as 94% customers out of 50 have Savings Bank A/c with it
where as ING Vysya has moderate amount of Saving Bank A/c customers.
SBI has more customers for Current A/c as compared to ING Vysya Bank.
SBI seems to provide better interest rates to the customers than ING Vysya bank and
hence it is 20% more than ING Vysya.
As far as Advances are concerned ING Vysya Bank takes the lead with 30%
customers opting for it where as SBI has less customers for Advances.
The charges at ING Vysya bank less moderate than that of SBI bank i.e., 52% of the
people say that the charges are moderate at ING Vysya and 66% say that charges are
moderate at SBI.
76% out of 50 customers of ING Vysya bank are satisfied with the services provided
by the bank and 90% of 50 customers of SBI are satisfied with the services provided
by the bank. The satisfaction level of the customers is higher in SBI than that of ING
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Vysya Bank.
The transactions related to the services provided by ING Vysya and SBI are almost
similar. But 10% of 50 ING Vysya customers state that the transactions are slow and
14% of 50 SBI customers say the transactions are slow. And 30% of ING Vysya
Customers say that service is quick whereas in SBI it is 26%.
Out of 100 customers, 56% say that SBI is Good at its services, 15% say it is Best,
25% say it is moderate and only 4% say that it is poor whereas, about ING Vysya
31% say service is good, 13% say it is best, 39% say it is moderate, 13% say it is poor
and 4% do not prefer it.
Recommendations
ING Vysya bank needs to expand the financial services being offered to retail
customers to increase the size and diversification of the deposit base.
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Implement an automated delivery system for payment services.
More number of ATMs to be opened by ING Vysya Bank.
Customer queries should be answered should be attended immediately.
To facilitate internet banking.
Product Innovation:
Customers look for new products which offer stable returns coupled with total
protection. ING Vysya will need to innovate in terms of product development to meet
ever changing customer needs.
Customer Education and Services:

In the present competitive scenario a key differentiator would be professional
customer service in terms of quality of advice on product choice. Servicing should
focus on enhancing the customer experience and maximizing customer convenience.
This calls for effective CRM system which eventually would create long lasting
relationship with the customer.
Untapped Market Segment:

It is important for ING Vysya to increase customer base in semi urban and rural areas
which offer huge potential.
Conclusion
Annual growth in bank credit to the commercial sector is at 25.4% as on March
31, 2007 and was lower than 27.2% against previous year. Till 2010, retail banking is
expected to grow at a CAGR of 28% to touch a figure of INR 9,700 billion. This
requires expansion and diversification of retail product portfolio, better penetration
and faster service mechanism.
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SBI and ING Vysya bank has contributed a lot towards financial growth of the Indian
economy. SBI has created a niche for itself and ING Vysya bank has to strive for the
same.
Based on all the analysis it is concluded that SBI wins over ING Vysya bank in
most of the aspects.
The Retail Banking has immense opportunities in a growing economy like
India. As the growth story gets unfolded in India, retail banking is going to emerge a
major driver. The rise of Indian middle class is an important contributory factor in
this regard. The percentage of middle to high-income Indian households is
continuously rising. The younger population not only wields increasing purchasing
power, but as far as acquiring personal debt is concerned, they are perhaps more
comfortable than previous generations.
And therefore, ING Vysya bank has encash this opportunity by providing
excellent customer service at an economical cost
Thus, in this competitive market and global marketing ING Vysya should not
leave any stone unturned to strive for maximum customer service.
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BANKING INDUSTRY
OVERVIEW
INDUSTRY OVERVIEW
History:
Banking in India has its origin as carry as the Vedic period. It is believed that
the transition from money lending to banking must have occurred even before Manu,
the great Hindu jurist, who has devoted a section of his work to deposits and advances
and laid down rules relating to the interest. During the moghal period, the indigenous
bankers played a very important role in lending money and financing foreign trade
and commerce. During the days of East India Company, it was to turn of the agency
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houses top carry on the banking business. The general bank of India was the first joint
stock bank to be established in the year 1786.The others which followed were the
Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have
continued till 1906, while the other two failed in the meantime. In the first half of the
19th Century the East India Company established three banks; The Bank of Bengal in
1809, The Bank of Bombay in 1840 and The Bank of Madras in 1843.These three
banks also known as presidency banks and were independent units and functioned
well. These three banks were amalgamated in 1920 and The Imperial Bank of India
was established on the 27th Jan 1921, with the passing of the SBI Act in 1955, the
undertaking of The Imperial Bank of India was taken over by the newly constituted
SBI. The Reserve Bank which is the Central Bank was created in 1935 by passing of
RBI Act 1934, in the wake of swadeshi movement, a number of banks with Indian
Management were established in the country namely Punjab National Bank Ltd, Bank
of India Ltd, Canara Bank Ltd, Indian Bank Ltd, The Bank of Baroda Ltd, The
Central Bank of India Ltd .On July 19th 1969, 14 Major Banks of the country were
nationalized and in 15th April 1980 six more commercial private sector banks were
also taken over by the government. The Indian Banking industry, which is governed
by the Banking Regulation Act of India 1949, can be broadly classified into two
major categories, non-scheduled banks and scheduled banks. Scheduled Banks
comprise commercial banks and the co-operative banks.
The first phase of financial reforms resulted in the nationalization of 14 major
banks in 1969 and resulted in a shift from class banking to mass banking. This in turn
resulted in the significant growth in the geographical coverage of banks. Every bank
had to earmark a min percentage of their loan portfolio to sectors identified as
priority sectors the manufacturing sector also grew during the 1970s in protected
environments and the banking sector was a critical source. The next wave of reforms
saw the nationalization of 6 more commercial banks in 1980 since then the number of
scheduled commercial banks increased four- fold and the number of bank branches
increased to eight fold.
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After the second phase of financial sector reforms and liberalization of the
sector in the early nineties. The PSBs found it extremely difficult to complete with
the new private sector banks and the foreign banks. The new private sector first made
their appearance after the guidelines permitting them were issued in January 1993.
The Indian Banking System:
Banking in our country is already witnessing the sea changes as the banking
sector seeks new technology and its applications. The best port is that the benefits are
beginning to reach the masses. Earlier this domain was the preserve of very few
organizations. Foreign banks with heavy investments in technology started giving
some Out of the world customer services. But, such services were available only to
selected few- the very large account holders. Then came the liberalization and with it
a multitude of private banks, a large segment of the urban population now requires
minimal time and space for its banking needs.
Automated teller machines or popularly known as ATM are the three

alphabets that have changed the concept of banking like nothing before. Instead of
tellers handling your own cash, today there are efficient machines that dont talk but
just dispense cash. Under the Reserve Bank of India Act 1934, banks are classified as
scheduled banks and non-scheduled banks. The scheduled banks are those, which are
entered in the Second Schedule of RBI Act, 1934. Such banks are those, which have
paid- up capital and reserves of an aggregate value of not less than Rs.5 lacs and
which satisfy RBI that their affairs are carried out in the interest of their depositors.
All commercial banks Indian and Foreign, regional rural banks and state co-operative
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banks are Scheduled banks. Non Scheduled banks are those, which have not been
included in the Second Schedule of the RBI Act, 1934.
The organized banking system in India can be broadly classified into three
categories: (i) Commercial Banks (ii) Regional Rural Banks and (iii) Co-operative
banks. The Reserve Bank of India is the supreme monetary and banking authority in
the country and has the responsibility to control the banking system in the country. It
keeps the reserves of all commercial banks and hence is known as the Reserve
Bank.
Current scenario:Currently (2007), the overall banking in India is considered as fairly mature in
terms of supply, product range and reach - even though reach in rural India still
remains a challenge for the private sector and foreign banks. Even in terms of quality
of assets and Capital adequacy, Indian banks are considered to have clean, strong and
transparent balance sheets - as compared to other banks in comparable economies in
its region. The Reserve Bank of India is an autonomous body, with minimal pressure
from the Government. With the growth in the Indian economy expected to be strong
for quite some time especially in its services sector, the demand for banking services
especially retail banking, mortgages and investment services are expected to be
strong. Mergers & Acquisitions., takeovers, are much more in action in India.
One of the classical economic functions of the banking industry that has
remained virtually unchanged over the centuries is lending. On the one hand,
competition has had considerable adverse impact on the margins, which lenders have
enjoyed, but on the other hand technology has to some extent reduced the cost of
delivery of various products and services.
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Bank is a financial institution that borrows money from the public and lends
money to the public for productive purposes. The Indian Banking Regulation Act of
1949 defines the term Banking Company as "Any company which transacts banking
business in India" and the term banking as "Accepting for the purpose of lending all
investment of deposits, of money from the public, repayable on demand or
otherwise and withdrawal by cheque, draft or otherwise".
Banks play important role in economic development of a country,

like:
Banks mobilise the small savings of the people and make them available for
productive purposes.
Promotes the habit of savings among the people thereby offering attractive
rates of interests on their deposits.
Provides safety and security to the surplus money of the depositors and as well
provides a convenient and economical method of payment.
Banks provide convenient means of transfer of fund from one place to another.
Helps the movement of capital from regions where it is not very useful to regions
where it can be more useful.
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Banks advances exposure in trade and commerce, industry and agriculture by
knowing their financial requirements and prospects.
Bank acts as an intermediary between the depositors and the investors. Bank also acts
as mediator between exporter and importer who does foreign trades.
Thus, Indian banking has come from a long way from being a sleepy business
institution to a highly pro-active and dynamic entity. This transformation has been
largely brought about by the large dose of liberalization and economic reforms that
allowed banks to explore new business opportunities rather than generating revenues
from conventional streams (i.e. borrowing and lending). The banking in India is
highly fragmented with 30 banking units contributing to almost 50% of deposits and
60% of advances.
The Structure of Indian Banking:

The Indian banking industry has Reserve Bank of India as its Regulatory
Authority. This is a mix of the Public sector, Private sector, Co-operative banks and
foreign banks. The private sector banks are again split into old banks and new banks.
Reserve Bank of India
Scheduled Banks
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Scheduled
Scheduled Co-operative Banks
Commercial Banks
Public Sector
Private Sector
Foreign
Banks
Banks
Banks
Nationalized
SBI & its
Banks
Associates
Old
Private
Sector Banks
Regional
Scheduled Urban
Scheduled State
Co-Operative
Co-Operative Banks
Banks
New Private
Sector Banks
Chart Showing Three Different Sectors of Banks:
i)
Public Sector Banks
ii)
Private Sector Banks
Public Sector Banks
SBI and
SUBSIDIARIES
Nationalized
Regional Rural
Banks
Banks
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SBI and subsidiaries:

This group comprises of the State Bank of India and its seven subsidiaries
viz., State Bank of Patiala, State Bank of Hyderabad, State Bank of Travancore, State
Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Saurashtra, State
Bank of India
State Bank of India (SBI) is the largest bank in India. If one measures by the
number of branch offices and employees, SBI is the largest bank in the world.
Established in 1806as Bank of Bengal it is the oldest commercial bank in the Indian
subcontinent. SBI provides various domestic, international and NRI products and
services, through its vast network in India and overseas. With an asset base of $126
billion and its reach, it is a regional banking behemoth. The government nationalized
the bank in1955, with the Reserve bank of India taking a 60% ownership stake. In
recent years the bank has focused on two priorities, 1), reducing its huge staff through
Golden handshake schemes known as the Voluntary Retirement Scheme, which saw
many of its best and brightest defects to the private sector, and 2), computerizing its
operations.
The State Bank of India traces its roots to the first decade of19th century,
when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 nd,
June 1806. The government amalgamated Bank of Bengal and two other Presidency
banks, namely, the Bank of Bombay and the bank of Madras, and named the
reorganized banking entity the Imperial Bank of India. All these Presidency banks
were incorporated as companies, and were the result of the royal charters. The
Imperial Bank of India continued to remain a joint stock company. Until the
establishment of a central bank in India the Imperial Bank and its early predecessors
served as the nation's central bank printing currency.
The State Bank of India Act 1955, enacted by the parliament of India,
authorized the Reserve Bank of India, which is the central Banking Organization of
India, to acquire a controlling interest in the Imperial Bank of India, which was
renamed the State Bank of India on30th April 1955.
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In recent years, the bank has sought to expand its overseas operations by
buying foreign banks. It is the only Indian bank to feature in the top 100 world banks
in the Fortune Global 500 rating and various other rankings. According to the Forbes
2000 listing it tops all Indian companies.
Nationalized banks:
This group consists of private sector banks that were nationalized. The
Government of India nationalized 14 private banks in 1969 and another 6 in the year
1980. In early 1993, there were 28 nationalized banks i.e., SBI and its 7 subsidiaries
plus 20 nationalized banks. In 1993, the loss making new bank of India was merged
with profit making Punjab National Bank. Hence, now only 27 nationalized banks
exist in India.
Regional Rural banks:

These were established by the RBI in the year 1975 of banking commission. It
was established to operate exclusively in rural areas to provide credit and other
facilities to small and marginal farmers, agricultural laborers, artisans and small
entrepreneurs.
Private Sector Banks:

Private Sector Banks
Old private
new private
Sector Banks
Sector Banks
Old Private Sector Banks:

This group consists of the banks that were establishes by the privy sectors,
committee organizations or by group of professionals for the cause of economic
betterment in their operations. Initially, their operations were concentrated in a few
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regional areas. However, their branches slowly spread throughout the nation as they
grow.
New private Sector Banks:

These banks were started as profit orient companies after the RBI opened the
banking sector to the private sector. These banks are mostly technology driven and
better managed than other banks.
Foreign banks:
These are the banks that were registered outside India and had originated in a
foreign country. The major participants of the Indian financial system are the
commercial banks, the financial institutions (FIs), encompassing term-lending
institutions, investment, Institutions, specialized financial institutions and the statelevel development banks, Non-Bank Financial Companies (NBFCs) and other market
intermediaries such as the stock brokers and money-lenders. The commercial banks
and certain variants of NBFCs are among the oldest of the market participants. The
FIs, on the other hand, are relatively new entities in the financial market place.
IMPORTANCE OF BANKING SECTOR IN A GROWING ECONOMY

In the recent times when the service industry is attaining greater importance
compared to manufacturing industry, banking has evolved as a prime sector providing
financial services to growing needs of the economy.
Banking industry has undergone a paradigm shift from providing ordinary banking
services in the past to providing such complicated and crucial services like, merchant
banking, housing finance, bill discounting etc. This sector has become more active
with the entry of new players like private and foreign banks. It has also evolved as a
prime builder of the economy by understanding the needs of the same and
encouraging the development by way of giving loans, providing infrastructure
facilities and financing activities for the promotion of entrepreneurs and other
business establishments for a fast developing economy like ours, presence of a sound
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financial system to mobilize and allocate savings of the public towards productive
activities is necessary. Commercial banks play a crucial role in this regard.
The Banking sector in recent years has incorporated new products in their
businesses, which are helpful for growth. The banks have started to provide fee-based
services like, treasury operations, managing derivatives, options and futures, acting as
bankers to the industry during the public offering, providing consultancy services,
acting as an intermediary between two-business entities etc.At the same time, the
banks are reaching out to other end of customer requirements like, insurance premium
payment, tax payment etc. It has changed itself from transaction type of banking into
relationship banking, where you find friendly and quick service suited to your needs.
This is possible with understanding the customer needs their value to the bank, etc.
This is possible with the help of well organized staff, computer based network for
speedy transactions, products like credit card, debit card, health card, ATM etc. These
are the present trend of services. The customers at present ask for convenience of
banking transactions, like 24 hours banking, where they want to utilize the services
whenever there is a need.
The relationship banking plays a major and important role in growth, because
the customers now have enough number of opportunities, and they choose according
to their satisfaction of responses and recognition they get. So the banks have to play
cautiously, else they may lose out the place in the market due to competition, where
slightest of opportunities are captured fast.
Another major role played by banks is in transnational business, transactions
and networking. Many leading Indian banks have spread out their network to other
countries, which help in currency transfer and earn exchange over it. These banks
play a major role in commercial import and export business, between parties of two
countries. This foreign presence also helps in bringing in the international standards
of operations and ideas. The liberalization policy of 1991 has allowed many foreign
banks to enter the Indian market and establish their business. This has helped large
amount of foreign capital inflow & increase our Foreign exchange reserve.
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Another emerging change happening all over the banking industry is
consolidation through mergers and acquisitions. This helps the banks in strengthening
their empire and expanding their network of business in terms of volume and
effectiveness.
EMERGING SCENARIO IN THE BANKING SECTOR:
The Indian banking system has passed through three distinct phases from the
time of inception. The first was being the era of character banking, where you were
recognized as a credible depositor or borrower of the system. This era come to an end
in the sixties. The second phase was the social banking. Nowhere in the democratic
developed world, was banking or the service industry nationalized. But this was
practiced in India. Those were the days when bankers has no clue whatsoever as to
how to determine the scale of finance to industry. The third era of banking which is in
existence today is called the era of Prudential Banking. The main focus of this phase
is on prudential norms accepted internationally.
Current Scenario
The industry is currently in a transition phase. On the one hand, the PSBs, which
are the mainstay of the Indian Banking system are in the process of shedding their
flab in terms of excessive manpower, excessive non Performing Assets (Npas) and
excessive governmental equity, while on the other hand the private sector banks are
consolidating themselves through mergers and acquisitions.
PSBs, which currently account for more than 78 percent of total banking industry
assets are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling
revenues from traditional sources, lack of modern technology and a massive
workforce while the new private sector banks are forging ahead and rewriting the
traditional banking business model by way of their sheer innovation and service. The
PSBs are of course currently working out challenging strategies even as 20 percent of
their massive employee strength has dwindled in the wake of the successful Voluntary
Retirement Schemes (VRS) schemes.
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The private players however cannot match the PSBs great reach, great size
and access to low cost deposits. Therefore one of the means for them to combat the
PSBs has been through the merger and acquisition (M& A) route. Over the last two
years, the industry has witnessed several such instances. For instance, Hdfc Banks
merger with Times Bank Icici Banks acquisition of ITC Classic, Anagram Finance
and Bank of Madura. Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank
are said to be on the lookout. The UTI bank- Global Trust Bank merger however
opened a pandoras box and brought about the realization that all was not well in the
functioning of many of the private sector banks.
Private sector Banks have pioneered internet banking, phone banking,
anywhere banking, and mobile banking, debit cards, Automatic Teller Machines
(ATMs) and combined various other services and integrated them into the mainstream
banking arena, while the PSBs are still grappling with disgruntled employees in the
aftermath of successful VRS schemes.
Also, following Indias commitment to the W To agreement in respect of the services
sector, foreign banks, including both new and the existing ones, have been permitted
to open up to 12 branches a year with effect from 1998-99 as against the earlier
stipulation of 8 branches.
A talk of government diluting their equity from 51 percent to 33 percent in
November 2000 has also opened up a new opportunity for the takeover of even the
PSBs. The FDI rules being more rationalized in Q1FY02 may also pave the way for
foreign banks taking the M& A route to acquire willing Indian partners.
Meanwhile the economic and corporate sector slowdown has led to an
increasing number of banks focusing on the retail segment. Many of them are also
entering the new vistas of Insurance. Banks with their phenomenal reach and a
regular interface with the retail investor are the best placed to enter into the insurance
sector. Banks in India have been allowed to provide fee-based insurance services
without risk participation invest in an insurance company for providing infrastructure
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and services support and set up of a separate joint-venture insurance company with
risk participation.
Aggregate Performance of the Banking Industry

Aggregate deposits of scheduled commercial banks increased at a
compounded annual average growth rate (CAGR) of 17.8 percent during 1969-99,
while bank credit expanded at a CAGR of 16.3 percent per annum. Banks
investments in government and other approved securities recorded a CAGR of 18.8
percent per annum during the same period.
In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP)
growth of only 6.0 percent as against the previous years 6.4 percent. The WPI Index
(a measure of inflation) increased by 7.1 percent as against 3.3 percent in FY00.
Similarly, money supply (M3) grew by around 16.2 percent as against 14.6 percent a
year ago.
The growth in aggregate deposits of the scheduled commercial banks at 15.4
percent in FY01 percent was lower than that of 19.3 percent in the previous year,
while the growth in credit by SCBs slowed down to 15.6 percent in FY01 against 23
percent a year ago.
The industrial slowdown also affected the earnings of listed banks. The net
profits of 20 listed banks dropped by 34.43 percent in the quarter ended March 2001.
Net profits grew by 40.75 percent in the first quarter of 2000-2001, but dropped to
4.56 percent in the fourth quarter of 2000-2001.
On the Capital Adequacy Ratio (CAR) front while most banks managed to
fulfill the norms, it was a feat achieved with its own share of difficulties. The CAR,
which at present is 9.0 percent, is likely to be hiked to 12.0 percent by the year 2004
based on the Basle Committee recommendations. Any bank that wishes to grow its
assets needs to also shore up its capital at the same time so that its capital as a
percentage of the risk-weighted assets is maintained at the stipulated rate. While the
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IPO route was a much-fancied one in the early 90s, the current scenario doesnt look
too attractive for bank majors.
Consequently, banks have been forced to explore other avenues to shore up
their capital base. While some are wooing foreign partners to add to the capital others
are employing the M& A route. Many are also going in for right issues at prices
considerably lower than the market prices to woo the investors.
Interest Rate Scene

The two years, post the East Asian crises in 1997-98 saw a climb in the global interest
rates. It was only in the later half of FY01 that the US Fed cut interest rates. India has
however remained more or less insulated. The past 2 years in our country was
characterized by a mounting intention of the Reserve Bank Of India (RBI) to steadily
reduce interest rates resulting in a narrowing differential between global and domestic
rates.
The RBI has been affecting bank rate and CRR cuts at regular intervals to improve
liquidity and reduce rates. The only exception was in July 2000 when the RBI
increased the Cash Reserve Ratio (CRR) to stem the fall in the rupee against the
dollar. The steady fall in the interest rates resulted in squeezed margins for the banks
in general.
Governmental Policy
After the first phase and second phase of financial reforms, in the 1980s
commercial banks began to function in a highly regulated environment, with
administered interest rate structure, quantitative restrictions on credit flows, high
reserve requirements and reservation of a significant proportion of lendable resources
for the priority and the government sectors. The restrictive regulatory norms led to the
credit rationing for the private sector and the interest rate controls led to the
unproductive use of credit and low levels of investment and growth. The resultant
financial repression led to decline in productivity and efficiency and erosion of
profitability of the banking sector in general.
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This was when the need to develop a sound commercial banking system was
felt. This was worked out mainly with the help of the recommendations of the
Committee on the Financial System (Chairman: Shri M. Narasimham), 1991. The
resultant financial sector reforms called for interest rate flexibility for banks,
reduction in reserve requirements, and a number of structural measures. Interest rates
have thus been steadily deregulated in the past few years with banks being free to fix
their Prime Lending Rates(PLRs) and deposit rates for most banking products. Credit
market reforms included introduction of new instruments of credit, changes in the
credit delivery system and integration of functional roles of diverse players, such as,
banks, financial institutions and non-banking financial companies (Nbfcs). Domestic
Private Sector Banks were allowed to be set up, PSBs were allowed to access the
markets to shore up their Cars.
Implications of Some Recent Policy Measures
The allowing of PSBs to shed manpower and dilution of equity are moves that
will lend greater autonomy to the industry. In order to lend more depth to the capital
markets the RBI had in November 2000 also changed the capital market exposure
norms from 5 percent of banks incremental deposits of the previous year to 5 percent
of the banks total domestic credit in the previous year. But this move did not have the
desired effect, as in, while most banks kept away almost completely from the capital
markets, a few private sector banks went overboard and exceeded limits and indulged
in dubious stock market deals. The chances of seeing banks making a comeback to
the stock markets are therefore quite unlikely in the near future.
The move to increase Foreign Direct Investment FDI limits to 49 percent from
20 percent during the first quarter of this fiscal came as a welcome announcement to
foreign players wanting to get a foot hold in the Indian Markets by investing in
willing Indian partners who are starved of networth to meet CAR norms. Ceiling for
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FII investment in companies was also increased from 24.0 percent to 49.0 percent and
have been included within the ambit of FDI investment.
The abolishment of interest tax of 2.0 percent in budget 2001-02 will help
banks pass on the benefit to the borrowers on new loans leading to reduced costs and
easier lending rates. Banks will also benefit on the existing loans wherever the
interest tax cost element has already been built into the terms of the loan. The
reduction of interest rates on various small savings schemes from 11 percent to 9.5
percent in Budget 2001-02 was a much awaited move for the banking industry and in
keeping with the reducing interest rate scenario, however the small investor is not
very happy with the move.
Some of the not so good measures however like reducing the limit for tax
deducted at source (TDS) on interest income from deposits to Rs 2,500 from the
earlier level of Rs 10,000, in Budget 2001-02, had met with disapproval from the
banking fraternity who feared that the move would prove counterproductive and lead
to increased fragmentation of deposits, increased volumes and transaction costs. The
limit was thankfully partially restored to Rs 5000 at the time of passing the Finance
Bill in the Parliament.
April 2001-Credit Policy Implications

The rationalization of export credit norms in will bestow greater operational
flexibility on banks, and also reduce the borrowing costs for exporters. Thus this
move could trigger exports growth in the future. Banks can also hope to earn
increased revenue with the interest paid by RBI on CRR balances being increased
from 4.0 percent to 6.0 percent.
The stock market scam brought out the unholy nexus between the Cooperative
banks and stockbrokers. In order to usher in greater prudence in their operations, the
RBI has barred Urban Cooperative Banks from financing the stock market operations
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and is also in the process of setting up of a new apex supervisory body for them.
Meanwhile the foreign banks have a bone to pick with the RBI. The RBI had
announced that forex loans are not to be calculated as a part of Tier-1 Capital for
drawing up exposure limits to companies effective 1 April 2002.
This will force foreign banks either to infuse fresh capital to maintain the
capital adequacy ratio (CAR) or pare their asset base. Further, the RBI has also
sought to keep foreign competition away from the nascent net banking segment in
India by allowing only Indian banks with a local physical presence, to offer Internet
banking
Crystal Gazing
On the macro economic front, GDP is expected to grow by 6.0 to 6.5 percent while
the projected expansion in broad money (M3) for 2001-02 is about 14.5 percent.
Credit and deposits are both expected to grow by 15-16 percent in FY02. India's
foreign exchange reserves should reach US$50.0 billion in FY02 and the Indian rupee
should hold steady.
The interest rates are likely to remain stable this fiscal based on an expected
downward trend in inflation rate, sluggish pace of non-oil imports and likelihood of
declining global interest rates. The domestic banking industry is forecasted to witness
a higher degree of mergers and acquisitions in the future. Banks are likely to opt for
the universal banking approach with a stronger retail approach. Technology and
superior customer service will continue to be the imperatives for success in this
industry.
Public Sector banks that imbibe new concepts in banking, turn tech savvy, leaner
and meaner post VRS and obtain more autonomy by keeping governmental stake to
the minimum can succeed in effectively taking on the private sector banks by virtue
of their sheer size. Weaker PSU banks are unlikely to survive in the long run.
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Consequently, they are likely to be either acquired by stronger players or will be
forced to look out for other strategies to infuse greater capital and optimize their
operations.
Foreign banks are likely to succeed in their niche markets and be the innovators in
terms of technology introduction in the domestic scenario. The outlook for the private
sector banks indeed looks to be more promising vis--vis other banks. While their
focused operations, lower but more productive employee force etc will stand them
good, possible acquisitions of PSU banks will definitely give them the much needed
scale of operations and access to lower cost of funds. These banks will continue to be
the early technology adopters in the industry, thus increasing their efficiencies. Also,
they have been amongst the first movers in the lucrative insurance segment. Already,
banks such as Icici Bank and Hdfc Bank have forged alliances with Prudential Life
and Standard Life respectively. This is one segment that is likely to witness a greater
deal of action in the future. In the near term, the low interest rate scenario is likely to
affect the spreads of majors. This is likely to result in a greater focus on better assetliability management procedures. Consequently, only banks that strive hard to
increase their share of fee-based revenues are likely to do better in the future.
Banking in India:
1
Central Bank
Reserve Bank of India

State Bank of India, Allahabad Bank, Andhra Bank,
Bank
of
Baroda,
Bank
of
India,
Bank
of
Maharastra,Canara Bank, Central Bank of India,

2
Nationalized
Banks
Corporation Bank, Dena Bank, Indian Bank, Indian

overseas Bank, Oriental Bank of Commerce, Punjab
and Sind Bank, Punjab National Bank, State Bank of
India, Union Bank of India, United Bank of India,
UCO Bank, and Vijaya Bank.
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Bank of Rajastan, Bharath overseas Bank, Catholic
Syrian Bank, Centurion Bank of Punjab, City Union
Bank, Development Credit Bank, Dhanalaxmi Bank,
3
Private Banks
Federal Bank, Ganesh Bank of Kurundwad, HDFC

Bank, ICICI Bank, IDBI, IndusInd Bank, ING Vysya
Bank, Jammu and Kashmir Bank, Karnataka Bank
Limited, Karur Vysya Bank, Kotek Mahindra Bank,
Lakshmivilas Bank, Lord Krishna Bank, Nainitak
Bank, Ratnakar Bank, Sangli Bank, SBI Commercial
and International Bank, South Indian Bank, Tamil
Nadu Mercantile Bank Ltd., United Western Bank,
UTI Bank, YES Bank.
COMPANY PROFILE
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ING Vysya Bank Ltd. provides its 1.5 million customers with a variety of fullservice retail banking products including deposits and loans, mutual funds,
investments, debit cards and credit cards. ING Vysya also provides credit
services,cash management services, foreign exchange and foreign trade services
along with treasury, investment and wealth management services. It is one of Indias
leading and largest private sector banks.
ING Vysya Bank, incorporated in 1930 as Vysya Bank Ltd and renamed ING Vysya
Bank in December 2002, is headquartered in Bangalore, India and is an associate of
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ING Group of the Netherlands, a global customer of Fidelity. ING Vysya has
occupied the premier position among Indian private sector banks since 1985. Since
that time, ING Vysya has enjoyed a series of firsts the first private sector bank to
launch credit cards in 1989 and the first to launch a housing finance subsidiary in
1990. In 1992, ING Vysya was also the first private sector bank to join SWIFT and
in 1997, the bank achieved the highest net worth among all Indian private sector
banks.
GEOGRAPHY
Although more concentrated in affluent, southern India, ING Vysya has more than
480 branches located throughout the country including metro, urban, semi-urban and
rural centers spread over 15 states of India.
BENEFITS
Allows the bank to offer customers AAA Banking
(Anywhere, Anytime, Anyhow)
Automates back-office operations, reducing required staffing
Reduces time to market for new products
New customer-centric architecture dramatically improves customer service
Less bandwidth requirements and little system overhead
Global expertise
PROJECT AMULA
At the beginning of 2000, ING Vysya was still using legacy branch automation
systems when the decision was made to migrate to a centralized banking solution.
The bank had two overwhelming requirements: timely information for decision
making and new product development, and the ability to offer new retail delivery
channels. In addition, the bank needed a solution that would be compatible with
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existing IT systems. Because the Indian banking industry is highly competitive,
banks are trying to improve levels of service to attract new customers and improve
retention. This led ING Vysya to create an aggressive business plan to modernize the
banks retail and corporate banking operations in south India where the bank has
prominent brand equity. Bank executives felt that if they could accomplish this goal,
they would be well on their way to becoming the leading customer-centric bank in
India.
ING Vysya decided that their first step was to migrate from legacy architecture to a
new, customer-centric, core-processing solution. The project was nicknamed
VysAmulya meaning invaluable, showing the banks level of committment to
the migration efforts.
AAA BANKING
With its integration of Profile, ING Vysya was able to offer Internet banking services
to its customers in June 2002. Named mi-b@nk, the service allows bank
customers to conduct transactions from their location of choice at home, in the
office or wherever they are able to access a PC with Internet connectivity. With a
simple mouse-click, ING Vysyas customers can now use mi-b@nk to view account
status and details, authorize fund transfers, retrieve a statement of accounts, order
demand drafts, run what-if scenarios for monthly installments, and compute
interest and maturity amounts for deposits and loans.
ING Vysya Life Insurance

ING Vysya Life Insurance Company Limited a part of the ING Group the worlds
largest financial services provider^ entered the private life insurance industry in
India in September 2001. Headquartered at Bangalore, ING Vysya Life is currently
present in 246 cities and has a network of over 300 branches, staffed by 7,000
employees and over 51,000 advisors, serving over 5.5 lakh customers
In fact, the company has developed the LifeMakerTM a simple tool which can be
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used to choose a plan most suitable to a specific customer based on his needs,
requirements and current life stage. This tool helps you build a complete financial
plan for life at every lifestage, whether the requirement is Protection, Savings,
Investment or Retirement. Suitable products from ING Vysya Life Insurances
product portfolio for each such requirement, makes selection of your plan an easy
exercise.
The Company aims to make customers look at life insurance afresh, not just as a tax
saving device but as a means to live life to the fullest. It believes in enhancing the
very quality of life, in addition to safeguarding an individual's security.
Distribution Channel
ING Vysya Life has a diversified distribution platform. While Tied Agency remains
the strongest channel, the Alternate Channels business within ING Vysya Life is one
of the fastest growing distribution channels. ING Vysya Life has strengthened its
position as the unparallel leader in the life insurance industry in cooperative banks tie
ups. The company currently has tie ups with 130 cooperative banks across the
country. The Alternate Channels division has Bancassurance, ING, Corporate Agents
and SMINCE
The Brand Positioning

In 2007, ING Vysya Life developed its unique brand positioning Mera farz. This
positioning means, ING Vysya Life helps its customers fulfil their responsibilities
towards themselves and their families. This powerful positioning has helped ING
Vysya Life create a distinct identity for itself. The latest brand campaign with a very
catchy jingle dwells on how a little planning and a helping hand from ING Vysya life
can help lighten the burden of responsibilities that often come with happy moments
and let you enjoy your life without any worries.
ING Investment Management

Profile:
In India ING Investment Management (I) Pvt Ltd has an investor base of over
1,52,677 with Rs. 5080.97 crores as of June 30th, 07 (Source: www.amfiindia.com ).
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With a presence in 34 locations, we currently manage 21 schemes.
ING Investment Management (I) Pvt Ltd has been associated with innovation and
responsive adaptability with sharp minds at work. ING Investment Management has
sealed a position of strength and is considered as one of the top contenders to
challenge the market leaders. ING Investment Management has enjoyed many firsts
and has always maintained a pioneering outlook.
A few achievements are highlighted below:First Investment Manager to launch a packaged concept in Asset Management Industry.
Awarded Abby Gold 2006 for its advertising Campaign
Corporate Social Responsibility

The bank as a part of its Corporate Social Responsibility has undertaken many
purposeful activities. However, most of these are channelized at the group level
under the aegis of the ING Vysya Foundation.
ING Vysya Foundation:

ING Vysya Foundation was set up almost three years ago actively supported by the
three business units of ING Vysya (ING Vysya Bank, ING Vysya Life Insurance and
ING Vysya Mutual Fund) to promote its Corporate Social Responsibility. The
mandate for the Foundation is to promote primary education for under privileged
children. This fits in well with ING Groups global vision of empowering children
through education and INGs partnership with UNICEF.
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PRODUCTS AND SERVICES
Page

Retail Banking at ING Vysya

1. Accounts & Deposits
ING has a portfolio of banking solutions and a range of offerings for people from all
walks of life, with a view to making banking an effortless task. Whether you require a
simple savings account or a sound banking partner, ING has the perfect solutions and
products to ensure a wealthy future.
Platina Preferred Banking

Everyday, the world gets smaller and faster. At ING, we understand how much
you value time, and how little you have to spare, given your stature and
responsibilities. The Platina suite of services is specially designed to relieve you of
the effort involved in handling all your financial and banking needs, making life just a
bit easier for you. Through these services you can enjoy advantages that stem from
INGs vast geographical presence, global insight, investment expertise, experience
across a diverse range of products and services, and financial tools that help you
explore a wealth of opportunities across the globe. With ING Platina, you can breathe
easier when it comes to handling your wealth.
Savings Account
The Savings accounts are primarily meant to inculcate a sense of saving for the
future and take care of individuals day to day banking requirements. These accounts
are meant to help individual customers protect their money. The Savings Accounts
also help individuals to handle their financial transactions through a systematic
banking channel.
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Current Accounts
Small, medium and large businesses alike will find that ING's current account
offerings come with all the benefits needed to stay ahead of competition. Whatever
the size or scope, you will find a current account option exclusively designed for you.
Orange Current Account
Advantage Current Account
General Current Account
Comfort Current Account
Term Deposits
ING's attractive interest rates on term deposits help you fulfill your needs and
keep your savings secure at the same time.
Overdue Deposits
The deposit which remains with the bank without renewal or maturity
instructions will be treated as Overdue Deposits and shall not earn any interest from
the date of maturity.
Demat Accounts
The ING Demat Account offers you a secure and convenient way to keep track of
your shares and investments, how much you've bought and sold over a period of time,
without the hassle of handling physical documents that get mutilated or lost in transit.
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2. Loans
Loans from ING range will help make a difference in your life, be it a home
improvement or a long awaited vacation.
Personal Loan
Personal Loans scheme from ING presents you with an easy way to turn your
dreams into reality.
Home Loan
The ING Vysya Housing Loan, will help you guarantee that life's uncertainties
do not affect your family's interests and your precious home.
Home Equity Loan

Keeping in mind, your needs, your concerns and worries, ING has come up with a
Home Equity Loan that is a hassle-free and a low cost solution that makes finance
available to you against your free, unencumbered residential property.
NRI Home Loan

NRI Home Loans from ING are offered to all NRI's on their return to India for
the purchase, construction, repair /renovation /alteration of a house or a composite
loan for self occupation.
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DATA ANALYSIS
1) Reasons for opting particular bank

Page

a) Charges
Frequency
Percent
Cumulative Percent
Yes
13
26.0
26.0
No
37
74.0
100.0
Total
50
100.a0
Yes
21
42.0
42.0
No
29
58.0
100.0
Total
50
100.0
ING Vysya
SBI
Interpretation:
The above charges represent that SBI charges relating to commission, interest
rates etc are less as compared to ING Vysya.
b) Services
ING Vysya
Yes
Frequency
Percent
Cumulative
Percent
28
56.0
56.0
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No
SBI
22
44.0
100.0
Total
50
100.0
Yes
37
74.0
74.0
No
13
26.0
100.0
Total
50
100.0
Interpretation:
The above chart depicts that the services of SBI Bank appeal more to the
customers and the customers are satisfied with the services of SBI Bank more as
compared to ING Vysya.
Frequency
Percent
Cumulative Percent
Yes
15
30.0
30.0
No
35
70.0
100.0
Total
50
100.0
c) Safety
ING
Vysya
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SBI
Yes
14
28.0
28.0
100.0
No
36
72.0
Total
50
100.0
Interpretation:
compared to SBI.
2) Product/ Service used by the customers at their respective banks.
Savings A/c
ING Vysya
Yes
Frequency
Percent
Cumulative Percent
37
74.0
74.0
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No
13
26.0
100.0
Total
50
100.0
Yes
47
94.0
94.0
No
6.0
100.0
Total
50
100.0
SBI
Interpretation:
SBI hits close to 100% as 94% customers out of 50 have Savings Bank A/c
with it where as ING Vysya has moderate amount of Saving Bank A/c customers.
Frequency
Percent
Cumulative
Percent
Yes
6.0
6.0
No
47
94.0
100.0
Total
50
100.0
Yes
8.0
8.0
No
46
92.0
100.0
Current a/c
ING
Vysya
SBI
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Total
50
100.0
Interpretation:
Frequency
Percent
Cumulative
Percent
Yes
10
20.0
20.0
No
40
80.0
100.0
Total
50
100.0
Yes
20
40.0
40.0
No
30
60.0
100.0
Total
50
100.0
Fixed Deposits
ING Vysya
SBI
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Interpretation:
SBI seems to provide better interest rates to the customers than ING Vysya bank
and hence it is 20% more than ING Vysya.
Advances
ING Vysya
SBI
Frequency
Percent
Cumulative Percent
Yes
15
30.0
30.0
No
35
70.0
100.0
Total
50
100.0
Yes
4.0
4.0
No
48
96.0
100.0
Total
50
100.0
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Interpretation:
3) Opinion about the charges of their bank by the customers
The charges of bank
ING Vysya
SBI
Frequency
Percent
Cumulative Percent
High
18.0
18.0
Moderate
26
52.0
70.0
Low
15
30.0
100.0
Total
50
100.0
High
6.0
6.0
Moderate
33
66.0
72.0
Low
14
28.0
100.0
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Total
50
100.0
Interpretation:
As per the chart the charges at ING Vysya bank less moderate than that of SBI
bank i.e., 52% of the people say that the charges are moderate at ING Vysya and 66%
say that charges are moderate at SBI.
4) Satisfaction level by the customers regarding the promptness of

service of their bank.
Satisfied with the services by
your bank
ING Vysya
SBI
Frequency
Percent
Cumulative
Percent
Yes
38
76.0
76.0
No
12
24.0
100.0
Total
50
100.0
Yes
45
90.0
90.0
No
10.0
100.0
Total
50
100.0
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Interpretation:
As per the above chart, 76% out of 50 customers of ING Vysya bank are satisfied
with the services provided by the bank and 90% of 50 customers of SBI are satisfied
with the services provided by the bank. The satisfaction level of the customers is
higher in SBI than that of ING Vysya Bank.
5) Transaction related to the services with respective banks.

How are the transactions related to
the service
ING Vysya
SBI
Frequency
Percent
Cumulative
Percent
Quick
15
30.0
30.0
Moderate
30
60.0
90.0
Slow
10.0
100.0
Total
50
100.0
Quick
13
26.0
26.0
Moderate
30
60.0
86.0
Slow
14.0
100.0
Total
50
100.0
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Interpretation:
The transactions related to the services provided by ING Vysya and SBI are
almost similar. But 10% of 50 ING Vysya customers state that the transactions are
slow and 14% of 50 SBI customers say the transactions are slow. And 30% of ING
Vysya Customers say that service is quick whereas in SBI it is 26%.
6) Ranks given by the customers on the banks for the services provided
by them.
ING Vysya bank
SBI
Cumulative
Frequency Percent Percent
Poor
4
Moderat25
e
Good
56
Best
15
Total
100
4.0
25.0
4.0
29.0
56.0
15.0
100.0
85.0
100.0
Not
preferred
Frequency Percent Cumulative

Percent
4
4.0
4.0
Poor
Moderate
good
Best
Total
13
39
31
13
100
13.0
39.0
31.0
13.0
100.0
17.0
56.0
87.0
100.0
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ING Vysya bank
SBi
Best
15.0%
Not preferred
Poor
4.0%
Moderate
25.0%
4.0%
Best
13.0%
Poor
13.0%
good
31.0%
good
Moderate
39.0%
56.0%
Interpretation:
Out of 100 customers, 56% say that SBI is Good at its services, 15% say it is
Best, 25% say it is moderate and only 4% say that it is poor whereas, about ING
Vysya 31% say service is good, 13% say it is best, 39% say it is moderate, 13% say it
is poor and 4% do not prefer it.
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FINDINGS
FINDINGS
SBI charges relating to commission, interest rates etc are less as compared to ING
Vysya.
The services of SBI Bank appeal more to the customers and the customers are
satisfied with the services of SBI Bank more as compared to ING Vysya.
compared to SBI.
Page

SBI hits close to 100% as 94% customers out of 50 have Savings Bank A/c with it
where as ING Vysya has moderate amount of Saving Bank A/c customers.
SBI seems to provide better interest rates to the customers than ING Vysya bank and
hence it is 20% more than ING Vysya.
The charges at ING Vysya bank less moderate than that of SBI bank i.e., 52% of the
people say that the charges are moderate at ING Vysya and 66% say that charges are
moderate at SBI.
76% out of 50 customers of ING Vysya bank are satisfied with the services provided
by the bank and 90% of 50 customers of SBI are satisfied with the services provided
by the bank. The satisfaction level of the customers is higher in SBI than that of ING
Vysya Bank.
The transactions related to the services provided by ING Vysya and SBI are almost
similar. But 10% of 50 ING Vysya customers state that the transactions are slow and
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14% of 50 SBI customers say the transactions are slow. And 30% of ING Vysya
Customers say that service is quick whereas in SBI it is 26%.
Out of 100 customers, 56% say that SBI is Good at its services, 15% say it is Best,
25% say it is moderate and only 4% say that it is poor whereas, about ING Vysya
31% say service is good, 13% say it is best, 39% say it is moderate, 13% say it is poor
and 4% do not prefer it.
RECOMMENDATIONS
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Recommendations
Expand the financial services being offered to retail customers to increase the size and
diversification of the deposit base.
Implement an automated delivery system for payment services.
More number of ATMs to be opened by ING Vysya Bank.
Customer queries should be answered should be attended immediately.
To facilitate internet banking.
Product Innovation:
Customers look for new products which offer stable returns coupled with total
protection. ING Vysya will need to innovate in terms of product development to meet
ever changing customer needs.
Customer Education and Services:
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In the present competitive scenario a key differentiator would be professional
customer service in terms of quality of advice on product choice. Servicing should
focus on enhancing the customer experience and maximizing customer convenience.
This calls for effective CRM system which eventually would create long lasting
relationship with the customer.
Untapped Market Segment:

It is important for ING Vysya to increase customer base in semi urban and rural areas
which offer huge potential.
CONCLUSION
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Conclusion
The annual growth in bank credit to the commercial sector is at 25.4% as on March
31, 2007 and was lower than 27.2% against previous year. Till 2010, retail banking is
expected to grow at a CAGR of 28% to touch a figure of INR 9,700 billion. This
requires expansion and diversification of retail product portfolio, better penetration
and faster service mechanism.
Based on all the analysis it is concluded that SBI wins over ING Vysya bank in most
of the aspects.
SBI has created a niche for itself and ING Vysya bank has to strive for the same.
The Retail Banking has immense opportunities in a growing economy like India. As
the growth story gets unfolded in India, retail banking is going to emerge a major
driver. The rise of Indian middle class is an important contributory factor in this
regard. The percentage of middle to high-income Indian households is continuously
rising. The younger population not only wields increasing purchasing power, but as
far as acquiring personal debt is concerned, they are perhaps more comfortable than
previous generations.
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And therefore, ING Vysya bank has encash this opportunity by providing excellent
customer service at an economical cost
Thus, in this competitive market and global marketing ING Vysya should not leave
any stone unturned to strive for maximum customer service.
BIBILOGRAPHY
Page

WEB SITES
1.
www.ingvysya.com
2.
www.sbi.co.in
Page

ANNEXURE
Page

QUESTIONNAIRE
Respected Sir/Madam,
I Miss Preeti Patil, the student of MBA-IV Sem of KLESs Institute of
Management Studies & Research, Hubli has undertaken a Comparative study of
Banking Operations with special reference to Retail Banking at ING Vysya Bank and
SBI Bank and to understand the customers expectations and to know their
perceptions about services related to retail banking. Feel free to answer & the result
will be used only for the purpose set. Thank you for your help & participation.
1.
Name:
2.
Age:
3.
Contact:
4.
Gender:
5.
Marital Status: a) Married
b) Unmarried
6.
Occupation:
b) Housewife c) Businessman
a) less than 20 yrs
Male
a) Student
b) 21-40 yrs
c) 41-60 yrs
d) 60 yrs & above
Female
e) Self employed Professional
f) Retired
d) Salaried
g) others
7.
Which of the following bank do you use?

a) ING Vysya
b) SBI
8.
Why have you opted for the above mentioned bank?

a) Charges
b) Services
c) Safety
d) Any other.
Page

9.
Which of the Products/Services you always use?

a) Savings A/C
b) Current A/C
c) Fixed Deposits
e) Others if any specify.
d) Advances
10.
What do you think about the charges of your bank?

a) High
b) Moderate
c) Low
11.
Are you satisfied with the promptness of services provided by your bank?
a) Yes
b) No
12.
What is your opinion about the services provided by your bank?

_______________________________________________________________
13.
How are the transactions related to the services provided by your bank?
a) Quick
b) Moderate
c) Slow
14.
What is the extra service that you want to avail in future related to the bank
preferred by you?
15.
Rank the followings banks in terms of all the services provided by the bank based
on the following parameters.
Best (5)
good (4)
Moderate (3)
Poor (2)
Not preferred (1)
a) SBI
b) ING Vysya bank
THANK YOU.
Page

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Comparative study of Banking Operations with special reference to Retail Banking at

ING Vysya Bank and SBI Bank, Hubli.

Title of the Project

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

Need for Study

About The Project

Comparative study of Banking Operations with special reference to Retail Banking at

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

of larger commercial banks. Services offered include: savings and

SCOPE FOR RETAIL BANKING IN INDIA

It helps in enhancing the economic development of a country.

purchasing power at their disposal and this is an opportunity to market Retail

ADVANTAGES OF RETAIL BANKING:

Comparative study of Banking Operations with special reference to Retail Banking at

Retail deposits are stable and constitute core deposits.

They constitute low cost funds for the banks.

Retail banking increases the subsidiary business of the banks.

Retail segment is a good avenue for funds deployment.

Consumer loans are presumed to be of lower risk and NPA perception.

Helps economic revival of the nation through increased production activity.

Innovative product development credit.

Retail banking involves minimum marketing efforts in a demanddriven economy.

DISADVANTAGES OF RETAIL BANKING:

Comparative study of Banking Operations with special reference to Retail Banking at

The volume of amount borrowed by a single customer is very low as compared to

substantial growth in retail

the areas of potential conflicts of

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

financial capability, consumer protection, regulation

and financial crime prevention.

CHALLENGES TO RETAIL BANKING IN INDIA

Knowing Your Customer (KYC) is important. So the banks are

required to adopt innovative strategies to meet customers needs and requirements in

responsibilities and challenges in managing, maintaining and optimizing the

networks. It is equally important that banks should

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

and deliberation, the retail banking is expected to

play a very important role in coming years, as in case of other nations.

Objectives of the Study

To study retail banking at ING Vysya bank and SBI bank

To understand perception of customers about retail banking in selected banks

Comparative study of Banking Operations with special reference to Retail Banking at

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

Comparative study of Banking Operations with special reference to Retail Banking at

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

More number of ATMs to be opened by ING Vysya Bank.

Customer queries should be answered should be attended immediately.

To facilitate internet banking.

Customer Education and Services:

Untapped Market Segment:

Comparative study of Banking Operations with special reference to Retail Banking at

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

Comparative study of Banking Operations with special reference to Retail Banking at

KLEs Institute of Management Studies and Research, Hubli

Comparative study of Banking Operations with special reference to Retail Banking at

The Indian Banking System: